Home home in the "range"

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

Have a listing you can’t sell? Make that property “home home in the range”.

As a user of "Range Pricing" let me see if I can explain how it works and how it lowers my days on market and usually results in a higher selling price for my Sellers.

"Range Pricing" is a marketing technique used to generate more showings on a property. As you know if they don't see it they can't buy it. The goal is to get the property to show up on MLS searches more often. This way Realtors can see the photos and property details and make a decision on whether or not to add it to their showing lists. You do have to disclose in the first line of remarks that the property is Range Priced.

Example: Lets say that the true Market Value of a home is $257,000 to $259,000. Usually the listing Realtor will list this in the low 260's in order to negotiate a selling price in the high 250's. Now let's say a Buyer walks in to another Realtors office and is looking for a home with the same parameters as the one listed but tells the Realtor he does not want to pay more than mid 250's and lets say the Realtor searches for homes with maximum list price of $260,000. Your listing will not show up!!!!! In reality if the Buyer sets a goal of $255,000 and the Seller's target is $259,000 there is probably a deal in there somewhere. But because of the way it was priced the Buyer never had the opportunity to see this property!!

Now "Range Pricing" using the same example would work like this. If the Seller and I agree that $257,000 to $259,000 would be an acceptable offer for his property I would "Range Price" this property from $249,000 to $269,000 with $269,000 being a full price offer(remember this must be disclosed on the first line of the remarks section). Now I am able to enter this listing with a list price of $249,000. Assuming the property is priced at market value whenever a Realtor searches the MLS for similar properties my listing will be the first one on the list!! Talk about market positioning. This all boils down to more exposure, more showings, more offers and normally a selling price in the middle of the "Range" which would be $257,000 to $259,000.

I have sold hundreds of properties using this technique and rarely have a problem with Buyers not understanding it. You will get low ball offers but you are always going to get those no matter how you price the property. The bottom line is if the house is priced properly and the Buyer sees it and likes it he will pay the price.

Explaining "Range Pricing" to the Buyer is very simple. Show them the remarks: This property is "Range Priced". The Seller will consider offers between $249,000 and $269,000 with $269,000 being a full price offer. Very straight forward. If and when the Buyer looks at additional properties they will understand the market value and hopefully make an offer accordingly. The Buyers I have worked with appreciate it that the Seller is letting them know up front that they are willing to negotiate. Buyers love to negotiate!

So try it on that listing you haven't been able to sell. Get some Buyers through the door. Your Seller may be more receptive to trying "Range Pricing" instead of lowering their price. So place that hard to sell listing “home home in the range”.

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 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Rainmaker
1,136,378
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Lee, I have to say it's funny how the MLS has no qualms about allowing a listing to be placed in the MLS $100,000 overpriced but they frown on a properly priced RPed property. It's also funny how they changed the rules 10 years after approving it because the "board" doesn't get it. OK I'm stopping. I promised myself to not debate this issue any more in a public forum. Get's away from me sometimes:) 

I will send Tina an email to make sure she understands the risk involved.

Apr 03, 2007 05:17 AM #38
Rainer
57,145
Tina Howell
RE/MAX DFW Associates VI - Little Elm, TX
Little Elm & Frisco Area Real Estate
OK - I see the difference now.  Sorry, but I must have had a mind-freeze.  I imagine this is why we don't see it much in our MLS.  Too bad for the consumers, we can't use every tool possible to help them.
Apr 03, 2007 05:23 AM #39
Rainmaker
1,136,378
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Tina, If what Lee says is the case with your MLS then the RPing is useless and a waste of time and effort. Being forced to use the "high price" as the list price (against your clients instructions) basically renders RPing useless. So they have effectively done what they set out to do which is eliminate a proven techinique they don't like. Wouldn't want to mess with the old timers.:)
Apr 03, 2007 05:24 AM #40
Rainmaker
1,136,378
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Tina, It's not about the consumer. Never is. It's about folks who are unwilling to change and accept different ways of doing business. It's about telling the owner of a property how they MUST price their property if they want access to the MLS. It's about interfering with agent/client relationships. It's about restricting LEGAL but aggressive business practices. Oops!! There I go again......whoa horsey..let me off:) 
Apr 03, 2007 05:29 AM #41
Ambassador
555,768
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Blog Boy...(Broker Bryant)

Like the good little wife that I am I'm reigning you in. Whoa...You Big Horse you. Get down off that soap box before I yank you down. Instead of beating this topic to death why don't you go Range Price another property? It'll make ya feel better :)

Tina...I have sat on our local BOR and MLS as a Director. It has been my learned experience that if the Directors don't understand something they close their minds to it. It's the nature of the Real Estate beast :)

TLW...ROAR!

Apr 03, 2007 05:45 AM #42
Rainer
57,145
Tina Howell
RE/MAX DFW Associates VI - Little Elm, TX
Little Elm & Frisco Area Real Estate

LOL!!! 

TLW - sorry you had to reign in him again ;)  Passion for your work is an awesome thing and BB seems to have it in spades.  Thanks again.

Apr 03, 2007 09:21 AM #43
Rainmaker
113,717
Chris Lengquist
Ad Astra Realty - Olathe, KS
Kansas City Real Estate Investing
I have to tell you I've never understood exactly how this works.  And now that I know I might like to give it a try. (Here comes the excuse....) But I'm just not sure how it will be perceived out here in Kansas City.  I think I'm willing to give it a try, however.   And I have just the property in mind.
May 28, 2007 10:28 AM #44
Rainmaker
1,136,378
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Hi Chris, You will certainly catch flack from your peers for using Range Pricing. You can count on it. But it's a price I'm willing to pay to get my listings shown and sold. You might want to review your MLS rules and regs as well. They don't like range pricing. I've been fighting this battle for 10 years. But during the battle I've sold about 400 properties. It's worth the fight.
May 28, 2007 11:38 AM #45
Ambassador
1,347,517
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co. - Frisco, TX
Real Estate Agents
I will definitely check on the MLS board about RP here. Anything is worth the try. I have tried a buyer's agent bonus. It brings more showings but it does not necessarily encourage an offer.

In my opinion, RP does encourage an offer. Do you normally see prices in the middle? Or do you see them closer to your low end?
Jun 04, 2007 08:22 AM #46
Rainmaker
1,136,378
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Loreena, Normally the initial offer comes in at the bottom of the range or lower. Negotiations however end up in the middle. But it certainly creates activity for the property.
Jun 04, 2007 08:39 AM #47
Ambassador
1,347,517
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co. - Frisco, TX
Real Estate Agents

What would be the normal reaction of Buyers or Buyer's Agents when they make a low-end offer and you come back at a counter very close to the middle?

And you mentioned that "Buyer looks at additional properties they will understand the market value and hopefully make an offer accordingly". What statements do you actually say to Buyer's Agents when handling this objection of you coming back with a counter "higher" than the low price?

 

Jul 15, 2007 06:01 AM #48
Ambassador
1,014,689
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation
Range pricing is an option in our MLS system, but I have never understood it.  Thanks for the great explanation! 
Jul 16, 2007 10:59 PM #49
Rainmaker
350,721
Mike Russell
Mike Russell & Associates - Overland Park, KS
Overland Park Kansas Real Estate
I think I have the perfectg listing to try this on
Jul 17, 2007 01:58 PM #50
Rainmaker
125,881
David Dee
IRN REALTY - Alhambra, CA
Real Estate - San Gabriel Valley (L.A.) & N. Orange County CA

Bryant,

Great post! Nice explanation of range pricing. Very clear and simple. Do you ever have any bad post? All of your posts are very enlightening!

Dave

Oct 22, 2007 09:24 PM #51
Ambassador
555,768
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Baby...

I don't feel much like Blogging but I don't want to fall too far behind on the point game. So I'm going to copy and paste this comment ten time :)

Maybe you'll get lucky...And I won't do this to you tomorrow :)

Folks...

Don't like...Tough :)

TLW...ROAR!

Jul 01, 2008 09:36 AM #52
Rainmaker
85,488
Cliff Johnson
Solid Source Realty - Stone Mountain, GA

Bryant,

  I probably won't use this one but do think the idea is interesting.

Mar 07, 2010 08:24 PM #53
Rainmaker
89,740
Lynn Krogseng
Keller Williams Premier Partners - Vancouver, WA

When I see the price ranges, I always wonder, "if I know you'll consider $249,000, why would I go to $269,000"?  Apparently it works although I wouldn't want to ask a seller to do that until I understood it more.  Thank you for a thought provoking post.

May 29, 2010 09:53 AM #54
Rainmaker
332,282
Dan Pittsenbarger
Keller Williams - Bellingham, WA
Improving Conditions

won't fly with our MLS and even if it was OK I don't think I would like how it would work on the MLS and various websites. For there to be any advantage the lower end of the range would have to be "the" number that shows up in the list price field so someone for searching with "X" price cap would pick it up. Then they go see it and find out that full price is really $20K higher (or whatever the upper end of the range maybe). It feels like a bait and switch type of tactic to me.

Oct 30, 2012 02:11 AM #55
Rainer
25,756
Steve Carter
RE/MAX of Boulder, Inc. - Boulder, CO
ABR, CRS

Great information Brian.  Do you find that buyers will make their offer right at the lowest price within the range, or listed price most of the time ($249,000 in your example).

Nov 01, 2012 02:01 AM #56
Rainmaker
1,136,378
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Hi Steve. Not really. Some do. some don't. I haven't found any difference with negotiations. The property will still sale for close to market value. That should be right in the middle of the range.

I do however get many more showings when using range pricing.

Nov 01, 2012 07:08 AM #57
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